There was a lot to this. That means a lot to love, but unfortunately, also a lot to not love quite so much.
What I liked:
-The art was very nice.
-The backgrounds all fit well.
-The characters were each very unique in appearance.
-You brought together many very talented voice actors.
-The music fit wonderfully.
-Most of the sound effects were cool.
-This was the first episode that felt like it truly set up a story arc to cover the next few episodes.
-The animation was pretty smooth.
What I didn't like:
-This episode seemed to embrace anime cliches in a number of ways.
-The main character has a level-headed "I want to keep my friends happy and get along with everyone, but if someone's a bad guy I'll convince them to stop" generic personality fitting of at least half of all anime main characters. Unfortunately, he lacks any unique personality quirk to set him apart from the rest.
-He even has a hidden power mode that he must learn to control, like 90% of anime main characters.
-You're running a tournament plot line where the main character knows he'll be facing a specific, evil opponent who he knows he can't defeat in his current state. Thus, he must train until his power level is over nine-thousand. Another pretty cliched anime plot.
-The argument that broke out seemed pretty contrived. Kirbopher came off as even more of a whiny woman than normal, managing to beat both Nylocke and Rockoon for my least favorite character spot. I won't lie, I was hoping Alpha would take the opportunity to remove Kirbopher from the series.
-However, Kirbopher's arguments were based on preschooler logic, so the other whiny chick is just as at fault for arguing back. Any person over the age of 8 would probably shrug off Kirbopher's rant and not even waste time replying, but she acted every bit as childish as he did. So after this episode I don't like her either.
-You put Alpha's godmode and the opponent who shuts him down with no effort in the same episode, which makes it seem less like this other guy is powerful (which is how it would seem if Alpha had been shutting people down for ages) and more like Alpha and his friends are below average.
-This guy who beat Alpha, based on his dialogue at first, seemed to show up JUST to deal with Alpha, yet after beating Alpha he speaks as if Alpha was to blame for attacking him. So did the guy seek out Alpha so that he could make douchy after-fight comments that don't make sense when put into perspective, or was he making overly dramatic "it's time" comments about something mundane like "to log in and check my mail"?
-The part after the credits was confusing and didn't feel like it helped the plot, in fact it seemed like it killed the suspense of the ending before the credits. Was Rockoon trying to turn everyone against Alpha and make him a Pariah, or was it just a weak way of trying to convince the viewer that Alpha was a force to be reckoned with? If it's the former, Rockoon should have done a lot less smug smiling and a lot more encouraging people to tell their friends and spread the word. I know I wouldn't be convinced of how terrible something is if the one talking who claims to have encountered it is pleasantly smiling while he recounts it. If it's the latter, it kind of falls flat because no one seemed intimidated by Alpha, even Rockoon himself, and even AFTER Rockoon's comments. Plus the episode ended with Alpha being beaten to a pulp, so following it with a "ALPHA IS GODTIER!" moment is really ineffectual.
-It's not clear what this thing that talks to Alpha is or why it has chosen him or why it has the power to talk to him AND take him over forcefully but can't accomplish what it needs to WITHOUT him. I'm sure you plan to reveal this eventually, but you have to remember in the mean time that you're forcing your audience to suspend disbelief and not ask questions. In most "hidden power" cases we at least have some knowledge to sink our teeth into. Maybe we don't know how it chose the main character or came to be, but we know WHAT the power is.
Overall though, best episode yet. Keep it up!